The Mini-USAGE Model

USAGE is a dynamic computable general equilibrium model of the United States. It is based on dynamic CGE models of Australia which have been applied widely in forecasting, policy analysis, estimation of technological trends and analysis of historical events. USAGE has many special features and is normally run with about 500 industries.

The detail included in USAGE and similar earlier models is important for practical, policy-oriented analyses. However, the detail means that comprehensive documentation is necessarily voluminous. While this documentation is essential for keeping track of theoretical and empirical details, it is not ideal for disseminating the principal ideas in the models or the techniques involved in building and applying them.

Mini-USAGE is a miniature version of USAGE. Our aim in creating Mini-USAGE is to reduce barriers to entry into the world of recursive-dynamic general equilibrium modelling. By providing Mini-USAGE, we hope to give modellers a tool for understanding the theory, construction and computing of recursive-dynamic models and for interpreting results. For this purpose, Mini-USAGE is unencumbered by detail. We hope that for some modellers, Mini-USAGE will be a useful skeleton onto which they can graft their own detail.

While stripped of detail, Mini-USAGE retains the main theoretical features of USAGE. These include: physical capital accumulation and rate-of-return-sensitive investment; foreign debt accumulation and the balance of payments; public debt accumulation and the public sector deficit; and dynamic adjustment of wage rates in response to gaps between the demand for and supply of labour.

In forming Mini-USAGE, we aggregated the database underlying USAGE from 500 to 5 industries. This allows the miniature database to be set out on a couple of pages and Mini-USAGE simulations to be run in a few seconds. With the miniature data being an aggregated version of the full-dimension data, we find at the macro level that results from Mini-USAGE are a good guide to those obtained from USAGE.

As with full-scale recursive-dynamic models, Mini-USAGE can be run with 4 basic closures. With these closures, recursive-dynamic models produce: estimates of changes in technologies and consumer preferences (historical closure); explanations of historical developments such as rapid growth international trade (decomposition closure); forecasts for industries, regions, occupations and households (forecast closure); and projections of the deviations from forecast paths that would be caused by the implementation of proposed policies and by other shocks to the economic environment (policy closure).

Mini-USAGE is run using RunDynam.

Files to Download

A Mini-USAGE application involving a forecast simulation and a tariff-cut policy simulation can be accessed by downloading the RunDynam zip archive MINI-USAGE-FP.ZIP and loading it into RunDynam.

Download the zip archive MINI-USAGE-FP.ZIP [recompiled 23/08/2010 with GEMPACK 10.0-002]

Documentation for Mini-USAGE is in: Mini-USAGE-Doc.pdf

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Last modified 2 August 2006